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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date of Report (Date of earliest event reported) January 19, 1999
NORTH BANCSHARES, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 0-22800 36-3915073
(State or other (commission file number) (IRS Employer
jurisdiction of Identification
incorporation) number)
100 West North Avenue, Chicago, Illinois 60610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 664-4320
N/A
Former name or former address, if changed since last report)
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Item 5. Other Events
On January 19, 1999, the Registrant issued the attached press
release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press Release, Dated January 19, 1999, regarding fourth quarter
1998 earnings and an increase in the regular quarterly dividend.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
NORTH BANCSHARES, INC.
(Registrant)
Date: January 19, 1999 /S/ Joseph A. Graber
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Joseph A. Graber
President and
Chief Executive Officer
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EXHIBIT
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NORTH BANCSHARES, INC NEWS RELEASE
RELEASE: IMMEDIATELY
CONTACT: Joseph A. Graber or Victor E. Caputo
(312) 664-4320
NORTH BANCSHARES ANNOUNCES
FOURTH QUARTER EARNINGS PER SHARE INCREASES
FOURTH QUARTER NET INCOME INCREASES
QUARTERLY DIVIDEND INCREASED 10%
CHICAGO, IL, JANUARY 19, 1999, - North Bancshares, Inc., the holding
company of North Federal Savings Bank today announced net income for the
quarter ended December 31, 1998 of $177,000, an increase of $57,000 or 48%
from $120,000 for the quarter ended December 31, 1997. Diluted earnings per
share for the quarter ended December 31, 1998 amounted to $.14, an improvement
of 75% from $.08 per share for the quarter ended December 31, 1997. Diluted
earnings per share, without the effects of a state income tax refund and gains
or losses on the sale of investment securities available for sale, increased
by $.03 or 38% to $.11 per share for the quarter ended December 31, 1998
compared with $.08 per share for the quarter ended December 31, 1997. Net
income, without the effects of a state tax refund and gains or losses on the
sale of investment securities available for sale, increased by $30,000 or 27%
for the quarter ended December 31, 1998, compared with the quarter ended
December 31, 1997. The improvement in earnings per share is primarily
related to lower income tax expense and a decrease in the average number of
outstanding shares.
Concurrent with this earnings release the Board of Directors of the
Company has declared a quarterly dividend of $.11 per share to be paid on
February 16, 1999 to stockholders of record as of February 1, 1999. This
represents a 10% increase from the last regular quarterly dividend paid in
1998.
Net interest income, before provision for loan losses, was $893,000 for
the quarter ended December 31, 1998 compared with $931,000 for the quarter
ended December 31, 1997. The net interest margin was 2.90% for the quarter
ended December 31, 1998 compared with 3.09% for the quarter ended December 31
, 1997. The decline in net interest margin was due primarily to proceeds
from mortgage loan prepayments and higher yielding investment securities
called prior to their maturity dates which were temporarily reinvested in
shorter term lower yielding investments.
Non-interest income amounted to $66,000 for the quarter ended December
31, 1998 compared with $70,000 for the quarter ended December 31, 1997. The
decline was primarily due to a $4,000 decrease in other non-interest income.
Non-interest expense decreased to $727,000 for the quarter ended
December 31, 1998 from $731,000 for the quarter ended December 31, 1997. The
decrease was primarily attributable to a $35,000 decrease in recognition and
retention plan and other expense partially offset by a $28,000 increase in
professional fees.
Income tax expense amounted to $49,000 for the quarter ended December 31
, 1998 compared with $150,000 for the quarter ended December 31, 1997. The
effective tax rate amounted to 22%, which is less than the statutory federal
rate of 34%, due to a refund of Illinois state income tax from prior years
that affected the provision for current income tax.
Net loans receivable totaled $82.1 million at December 31, 1998 compared
with $79.0 million at December 31, 1997. The increase was due primarily to
$2.5 million in participation loans purchased from neighboring financial
institutions. The loans were mainly multi-family property loans that are
located in the Bank's market area. At December 31, 1998, the Bank had $2.6
million in loan applications pending approval or closing and $1.0 million in
approved participaiton loans pending closing.
Mortgage-backed securities available for sale amounted to $10.8 million at
December 31, 1998. At December 31, 1997, there were no mortgage-backed
securities classified available for sale. The increase was due primarily to
a reallocation of investment securities and shorter term liquid assets.
Total deposits amounted to $76.2 million at December 31, 1998 compared
with $75.0 million at December 31, 1997. The $1.2 million increase was
primarily attributable to a $5.6 million increase in money market and
checking accounts, offset by a $4.4 million decrease in certificates of
deposit and passbook accounts. Non-interest bearing checking accounts
increased from $1.2 million at December 31, 1997 to $1.9 million at December
31, 1998.
Stockholders' equity was $13.2 million at December 31, 1998 compared
with $16.4 million at December 31, 1997. The decrease was primarily
attributable to a $3.0 million increase in treasury stock comprised of $3.9
million in stock repurchases, offset by $910,000 in stock options exercised.
Retained earnings remained steady at $11.1 million due to dividend payments
which which offset net income for the period.
Joseph A. Graber, President and Chief Executive Officer, commented:
"I am pleased with our fourth quarter results. The redeployment and
diversification of our assets during the past three quarters into higher
yielding investor property loans has not only helped to offset the effects of
an extremely high level of prepayments we experienced this past year but
places us in a good starting position for 1999." He added, "Our enhanced
money market deposit account has attracted $4.6 million and we continue to
increase our base of non-interest bearing checking accounts while reducing
our dependence on higher cost certificates of deposit. We have reduced the
ratio of certificates to total deposits from approximately 60% at the
beginning of the year to approximately 55%, while increasing our total
deposit base."
Mary Ann Hass, Chairman of the Board, commented:
"The Board of Directors has increased the regular quarterly dividend for
1999 by 10%, from $.10 to $.11 per share. This increase reflects our
improved quarterly operating results, our strong capital position and our
commitment to enhancing shareholder value."
North Bancshares, Inc. is the holding company for North Federal Savings
Bank. Its common stock is traded on the Nasdaq Stock Market under the symbol
"NBSI." It also operates a branch office in Wilmette IL. For 41 consecutive
quarters, the bank has received a five-star superior rating for safety from
Bauer Financial Reports, Inc., and is rated as one of the best in the nation
by Sheshunoff Information Services, Inc. North Federal is proud to support
local service and non-profit organizations. Its executives serve on the
boards of the Lincoln Park Chamber of Commerce, Old Town Chamber of Commerce,
Friends of the Near North Library and the Human Capital Council. Further
information is available on its website at www.northfederal.com including
prior press releases, SEC filings, company history, and current products,
services and interest rates.
(FINANCIAL STATEMENTS ATTACHED)
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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS DEC 31, 1998 DEC 31, 1997
(UNAUDITED)
<S> <C> <C>
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Cash and due from banks $ 810 $ 727
Interest-bearing deposits 2,413 2,937
Federal funds sold 5,722 5,976
Investment in dollar denominated mutual funds 801 1,477
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TOTAL CASH AND CASH EQUIVALENTS 8,746 11,117
Investment securities available for sale 14,880 23,250
Mortgage-backed securities held to maturity 4,517 5,841
Mortgage-backed securities available for sale 10,845 -
Stock in Federal Home Loan Bank of Chicago 1,705 1,705
Loans receivable, net of allowance for loan
losses of $214 at December 31, 1998 and
$208 at December 31, 1997 82,123 79,031
Accrued interest receivable 862 1,060
Premises and equipment, net 1,021 1,043
Other assets 133 31
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TOTAL ASSETS $125,832 $123,078
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Deposit accounts $ 76,222 $75,041
Borrowed funds 34,100 29,100
Advance payments by borrowers for
taxes and insurance 1,036 1,239
Accrued interest payable and other liabilities 1,308 1,250
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TOTAL LIABILITIES 112,666 106,630
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Preferred stock, $.01 par value. Authorized
500,000 shares; none outstanding - -
Common stock, $.01 Par value. Authorized
3,500,000 shares; issued 1,914,075 shares 19 19
Additional paid-in capital 13,437 13,767
Retained earnings, substantially restricted 11,127 11,139
Treasury stock at cost (651,182 shares at
December 31, 1998 and 484,293 shares at
December 31, 1997) (10,664) (7,706)
Accumulated other comprehensive loss (313) (216)
Common stock acquired by Employee Stock
Ownership Plan (444) (555)
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TOTAL STOCKHOLDERS' EQUITY 13,162 16,448
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $125,832 $123,078
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</TABLE>
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NORTH BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
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INTEREST INCOME:
Loans receivable $1,515 $1,535 $5,924 $5,968
Interest-bearing deposits and federal funds sold 108 116 472 280
Investment securities available for sale 330 412 1,592 1,832
Mortgage-backed securities held to maturity 76 105 340 470
Mortgage-backed securities available for sale 140 - 141 -
Investment in mutual funds 4 21 51 101
Dividends on FHLB stock 30 30 124 100
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TOTAL INTEREST INCOME 2,203 2,219 8,644 8,751
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INTEREST EXPENSE:
Deposit accounts 826 831 3,266 3,201
Borrowed funds 484 457 1,838 1,772
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TOTAL INTEREST EXPENSE 1,310 1,288 5,104 4,973
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NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES 893 931 3,540 3,778
PROVISION FOR LOAN LOSSES 6 - 6 -
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 887 931 3,534 3,778
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NON-INTEREST INCOME:
Gain on sale of investment securities available for sale, net (6) 7 75 60
Gain on sale of loans - - 3 -
Fees and service charges 69 56 263 211
Other 3 7 18 20
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TOTAL NON-INTEREST INCOME 66 70 359 291
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NON-INTEREST EXPENSE:
Compensation and benefits 383 382 1,695 1,602
Occupancy expense 105 113 479 474
Professional fees 59 31 264 149
Data processing 50 43 194 169
Advertising and promotion 25 21 138 133
Federal deposit insurance premium 11 47 46 47
Recognition and retention plan - 15 - 74
Other 94 79 330 422
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TOTAL NON-INTEREST EXPENSE 727 731 3,146 3,070
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INCOME BEFORE INCOME TAXES 226 270 747 999
INCOME TAX EXPENSE 49 150 235 363
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NET INCOME 177 120 512 636
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EARNINGS PER SHARE:
Basic .15 .09 .42 .45
Diluted .14 .08 .40 .42
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AVERAGE SHARES OUTSTANDING:
Basic 1,211,101 1,359,451 1,230,678 1,424,476
Diluted 1,262,275 1,441,563 1,273,520 1,501,567
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</TABLE>
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SELECTED FINANCIAL RATIOS AND OTHER DATA (UNAUDITED):
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
PERFORMANCE RATIOS:
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Return on assets (ratio of net income
to average total assets) (1) 0.56% 0.39% 0.41% 0.53%
Interest Rate Spread Information:
Average during period (1) 2.31 2.35 2.33 2.41
End of period (1) 2.38 2.47 2.38 2.47
Net interest margin (1) 2.90 3.09 2.94 3.19
Ratio of operating expenses to average assets (1) 2.30 2.68 2.54 2.62
Ratio of average interest-earning assets
to average interest-bearing liabilities 113.97 117.27 114.43 118.65
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DECEMBER 31, 1998 DECEMBER 31, 1997
<S> <C> <C>
ASSET QUALITY RATIOS:
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Non-performing assets to total assets 0.02 0.00
Allowance for loan losses to non-performing loans 891.67 N/A
Allowance for loan losses to loans receivable 0.26 0.26
CAPITAL RATIOS:
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Stockholders' equity to total assets 10.46 13.36
Average Stockholders' equity to average assets 11.18 14.06
Return on Stockholders' equity (ratio of net
income to average equity) (1) 3.70 3.73
Shares outstanding-actual 1,262,893 1,429,812
Book value per share 10.44 $11.50
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Number of full service offices 2 2
</TABLE>
(1) Annualized for the three month periods presented.
